Posted on July 22, 2008 by Robert Doggett, Texas RioGrande Legal Aid
Update of July 26, 2008: Congress passed the American Housing Rescue and Foreclosure Prevention Act of 2008 and among the numerous other reasons this bill is weak (see Federal Housing Bill Rescues Banks more than Borrowers here) it kept the provision relating to housing counseling that prohibited funding for civil litigation. Because that provision was objectionable to many, but not objectionable enough to strip it — the House sponsor tried to provide some wiggle room on the prohibition during the final debate on the bill:
Mr. Watt: On the Senate side, they put in a provision. We had already said you can’t use any of that money for class action litigation. On the Senate side, they put in a provision that said no civil litigation, and I think I’m satisfied that civil litigation is not broad enough to cover advice about foreclosures, that I’ve asked the Chair just to give me his opinion about whether the language in the bill is broad enough to foreclose any legal assistance with foreclosures.
Mr. Frank: All the debates I’ve heard about civil litigation have been concerned that plaintiffs’ lawyers would initiate lawsuits. We’re talking here, as the gentleman well knows, about citizens who are finding themselves as defendants in foreclosures, and I can’t imagine that people meant to exclude the ability of lawyers to defend people when we’ve got a record of some of these foreclosure packages being abusive.
So I would agree with the gentleman, and if necessary, I would hope we could make that very clear that defending someone who’s being foreclosed upon, when there have been inappropriate practices isn’t what has generally been meant here by a stopping the initiation of civil litigation.
Of course this might make some sense in states where the lender must file a suit to foreclose. What about the states where the lender can foreclose without suing? If the House had a problem with the language they should have just fixed rather than the silly exchange on the House floor. Pathetic.
The media is filled with advice to borrowers faced with foreclosure, and most of the advice is poor. See examples here and here. What is usually missing is a suggestion that the borrower seek the advice and assistance of a lawyer knowledgeable in the area. I admit there are probably not enough lawyers to help everyone; however, if it were me, I would stand in line to speak to an expert to get the whole picture, and develop the best strategy to save my home. I would start with the National Association of Consumer Advocates (website). Of course, the housing rescue bill could have funding legal assistance, rather than mere “counseling.”
Filed under: Advice for Borrowers, National Foreclosure News | 1 Comment »
Posted on July 9, 2008 by Robert Doggett, Texas RioGrande Legal Aid
Update of July 17, 2008: Dallas-Fort Worth foreclosure filings are up 24 percent from one year ago. See Dallas Morning News article.
Dr. James Gaines of Texas A&M University will undoubtedly try to explain away recent foreclosure numbers from Texas (as he has done in testimony before members of the Texas Legislature), however, a company who has been tracking foreclosure activity in Texas for many years disagrees:
In more evidence that the national housing troubles are hitting Central Texas, one of every 133 homes in Travis County was posted for foreclosure in the first six months of the year — compared with one in 265 homes in 2001.
The same trend prevailed in Williamson County, where one of every 95 homes was posted for foreclosure this year, compared with one in every 225 homes in 2001.
The calculations by Foreclosure Listing Service Inc. are a new way to look at the region’s rising foreclosures, which are higher than they were in 2004, when Central Texas was still in the doldrums of the tech bust.
They also answer those who say rising foreclosures simply reflect the increased number of homes in the region. “That is certainly one of the components, along with several others, including lenient lending practices,” said George Roddy Sr., president of the Addison company, which tracks foreclosures in many Texas cities.
But, he said, the contention “that today’s foreclosure posting rate on a per capita basis is not as bad as it was a decade ago does not fly.”
See Austin American-Statesman article of July 9, 2008 here.
Even Mortgage Bankers Association data shows Texas has a problem. Texas was the sixth of all states with the largest foreclosure inventory — by share of US foreclosures (as of the fourth quarter of 2007). It was third in the country as a percentage of loans. See MBA chart below as published by the Brookings Institute here. This finding is consistent with an earlier finding made by the Texas Department of Housing and Community Affairs in 2006 showing Texas with the sixth highest foreclosure rate. See study here, finding at page 35.
Filed under: State Foreclosure News, Texas | Leave a Comment »
Posted on July 7, 2008 by Robert Doggett, Texas RioGrande Legal Aid
With none of the fanfare that usually attends a big bill becoming law, President Bush signed the housing bill in private.
Update of July 30, 2008: President Bush signed the bill into law (now called the Housing and Economic Recovery Act of 2008). Source here.
Update of July 26, 2008: Senate passed the bill (they worked Saturday) sending it to the President. The media continues to buy the spin of the banks that wanted this bill all along. Just read this Julie Hirschfeld Davis piece from the AP here. Is she lying? Is this the “most significant housing legislation in decades”? Probably. But, it just could have been something that would last long past this crisis. This bill is temporary (only for loans made recently), and lenders do not have to participate. The vast majority will be left out in the cold. This bill is one thing — better than nothing at all.
Update of July 23, 2008: House passed the bill, but added the authority to bail out Fannie and Freddie should it be necessary. Estimates are $25 billion will be needed (NPR story here). See Speaker Pelosi’s comments here.
Update of July 11, 2008: Senate passed the bill, and it goes back to the House for consideration. See Washington Post article.
—Original article below—
Borrower advocates hate to say this aloud, but the federal housing rescue bill now dubbed the “American Housing Rescue and Foreclosure Prevention Act of 2008″ is a rescue alright — of the banks. It was written by the banks, for the banks. See Washington Post article. Surprised? Let’s think about it. What might a bill look like if it were written by the banks:
- No new laws prohibiting or even deterring dangerous lending products
- No new laws prohibiting unfair, abusive lending practices
- No right to mediate workouts of delinquent loans
- No right to make the loans affordable in bankruptcy court
- No reform whatsoever, so the industry can continue unabated
- Give BILLIONS to lenders in another voluntary program
Yep, that’s a lender bill alright. The banks will pick and choose the loans to refinance that make them the most money — not necessarily the loans that should be put into the program. “That means the housing bill will have ‘little or no impact on the number of foreclosures,’ according to O. Max Gardner III, a Shelby, N.C. bankruptcy attorney who works with homeowners who are trying to modify their mortgages.” MSNBC article “Little Foreclosure Relief Seen From Housing Bill” here. But wait, FHA will be guarding the program. What a relief. See “FHA Chief Warns Congress on housing rescue bill” here.)
Filed under: National Foreclosure News | 2 Comments »